CommScope (COMM, Financial) has attracted attention with a significant increase in bearish options trading. A total of 2,149 put options were traded, which is three times the usual activity. The most notable trades include the August 25th $5 puts and June 25th $6 calls, accumulating nearly 2,200 contracts in total. The Put/Call Ratio for these options stands at 3.34, indicating a bearish sentiment among investors.
Meanwhile, the at-the-money implied volatility for CommScope has risen by over two points. Investors are keenly anticipating the company's earnings report, which is scheduled for release on July 31.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 5 analysts, the average target price for CommScope Holding Co Inc (COMM, Financial) is $4.80 with a high estimate of $6.00 and a low estimate of $4.00. The average target implies an downside of 17.88% from the current price of $5.85. More detailed estimate data can be found on the CommScope Holding Co Inc (COMM) Forecast page.
Based on the consensus recommendation from 8 brokerage firms, CommScope Holding Co Inc's (COMM, Financial) average brokerage recommendation is currently 3.4, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for CommScope Holding Co Inc (COMM, Financial) in one year is $3.87, suggesting a downside of 33.79% from the current price of $5.845. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the CommScope Holding Co Inc (COMM) Summary page.
COMM Key Business Developments
Release Date: May 01, 2025
- Core Net Sales: $1.112 billion, a year-over-year increase of 23%.
- Core Adjusted EBITDA: $245 million, a year-over-year increase of 159%.
- Core Adjusted EBITDA Margin: 22% of revenues.
- CCS Revenue: $724 million, a 20% increase year-over-year.
- CCS Adjusted EBITDA: $182 million, an 87% increase year-over-year.
- Enterprise Fiber Revenue: $213 million, an 88% increase year-over-year.
- Core Net Adjusted EBITDA: $25 million, increased by $42 million from the prior year.
- ANS Net Sales: $225 million, a 20% increase year-over-year.
- ANS Adjusted EBITDA: $38 million, a 177% increase year-over-year.
- Adjusted EPS: $0.14 per share, compared to a loss of $0.24 in Q1 2024.
- Core CommScope Backlog: $1.179 billion, up $202 million from Q4 2024.
- Free Cash Flow: Use of $202 million in Q1 2025.
- Net Leverage Ratio: 7.8 times.
- Stock Buyback Program: $50 million approved by the Board of Directors.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CommScope Holding Co Inc (COMM, Financial) reported a 23% year-over-year increase in core net sales, reaching $1.112 billion.
- Core adjusted EBITDA increased by 159% year-over-year, reaching $245 million, marking the fourth consecutive quarter of sequential improvement.
- The enterprise fiber business saw an 88% increase in revenue year-over-year, driven by demand in data centers and AI-focused architectures.
- The company has a flexible global manufacturing footprint, which helps mitigate the impact of tariffs and supports US manufacturing.
- CommScope Holding Co Inc (COMM) has approved a stock buyback program, indicating confidence in the company's undervalued equity and potential shareholder value generation.
Negative Points
- The company faces potential tariff impacts, estimated to be between $10 million to $15 million in the second quarter, which they plan to mitigate by the third quarter.
- Despite strong performance, the economic environment remains fluid, with macroeconomic uncertainties affecting future projections.
- The ANS segment, although showing improvement, is still in the early phases of the DOCSIS 4.0 upgrade cycle, with some customers delaying their upgrade decisions.
- Free cash flow guidance for 2025 remains at breakeven, with significant cash burn in the first quarter due to working capital needs and higher interest payments.
- The company expects a sequential decline in core net adjusted EBITDA in the second quarter due to increased variable compensation and the elimination of first-quarter inventory adjustment benefits.
